MTN talks not to impact Bharti's ratings: S&P
Bharti Airtel's ongoing talks with South Africa-based MTN for a possible acquisition of stake will not have an impact on the telecom major's ratings.
By PTI |
NEW DELHI: Bharti Airtel's ongoing talks with South Africa-based MTN for a possible acquisition of stake will not have an impact on the telecom major's ratings, as the discussions are still preliminary, says global credit rating agency S&P.
However, the agency noted that if the possibility of a significant investment or buyout increases, then Bharti would likely be placed on credit-watch with negative implications.
Currently, Bharti has a medium investment grade rating of 'BBB-' with a stable outlook.
"This will signal rating pressure stemming from the financing and the incremental debt required to fund the outlay for the potential transaction," S&P said in a statement.
It also added that there may not be any upside potential in the ratings, if Bharti indeed pursues a significant investment or acquisition in MTN.
"While a prominent overseas investment adds diversity to Bharti's businesses and cash flows, the financing and the debt requirements are of greater concern, especially since Bharti has budgeted capital expenditures of about USD3.3 billion per annum," the rating agency said.
Earlier this week, both firms had said they are in exploratory discussions for a possible acquisition of stake in the South African mobile player.
However, the agency noted that if the possibility of a significant investment or buyout increases, then Bharti would likely be placed on credit-watch with negative implications.
Currently, Bharti has a medium investment grade rating of 'BBB-' with a stable outlook.
"This will signal rating pressure stemming from the financing and the incremental debt required to fund the outlay for the potential transaction," S&P said in a statement.
It also added that there may not be any upside potential in the ratings, if Bharti indeed pursues a significant investment or acquisition in MTN.
"While a prominent overseas investment adds diversity to Bharti's businesses and cash flows, the financing and the debt requirements are of greater concern, especially since Bharti has budgeted capital expenditures of about USD3.3 billion per annum," the rating agency said.
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Earlier this week, both firms had said they are in exploratory discussions for a possible acquisition of stake in the South African mobile player.
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